USPS to Raise Rates Again in July

Postal rates will go up July 1 across the board by an average of 1.6 percent, the U.S. Postal Service's Board of Governors said yesterday. The new rates are expected to generate more than $900 million in additional revenue for the agency.

First-Class mail will increase 1.5 percent on average. Although rates for a 1-ounce First-Class letter will remain unchanged at 34 cents, an additional ounce will increase from 21 cents to 23 cents. Postcards will increase a penny, to 21 cents, the first increase in the postcard rate since 1995.

There will be no mail classification changes in this decision.

The announcement brings a tumultuous end to the R-2000-1 rate case, which has been debated throughout the postal community for 16 months.

The board voted in closed session Monday to modify the April 10 decision of the Postal Rate Commission. By law, it can overturn the PRC's decision if the vote is unanimous. It has done so only once before, in 1981, according to USPS spokesman Greg Frey.

"We take this action mindful of our statutory obligation to assure the financial integrity of the nation's universal postal system," board chairman Robert F. Rider said in a statement. "As the officials responsible for matching revenue with costs, we found that additional revenue is essential and is adequately supported in the record compiled before the commission."

The PRC's original decision was allowed under protest Jan. 7, pending further review. In December, the board had sent the recommended rates back to the PRC, saying that the commission exceeded its authority when it lowered the amount of new revenue designated for the USPS' contingency fund from $1.7 billion to $1 billion. The PRC reiterated its decision in February, but the board sent the decision back to the PRC again in March.

The PRC's recommended average increases for each mail class were significantly lower than the board had recommended. The rate increases were 1.8 percent for First-Class; 9.9 percent for periodicals; 4.5 percent for enhanced carrier route; 8.8 percent for all other Standard-A mail; 2.7 percent for package services, including parcel post; 17.6 percent for bound printed matter; 16 percent for Priority Mail; 7.2 percent for nonprofit periodicals; and 4.8 percent for nonprofit standard.

The USPS said the new rates would help the agency out of its fiscal crisis. The agency is projecting a loss of $1.6 billion to $2.4 billion this fiscal year.

"Our productivity is running about 30 percent over planned productivity because of the field driving work hours below last year's work hours," said Richard Strasser, the USPS' chief financial officer. He said the agency has saved more than $750 million in expenses through April 30.

Though this decision effectively ends R2000-1, there still could be court challenges from mailers. Under law, parties can file a court appeal up to 15 days from the day the Public Printer -- which is part of the U.S. Government Printing Office -- makes the board's decision available for sale. The USPS has 10 days to send the case to the Public Printer, but it had not done so at press time.